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USD/CAD: Markets churned on Thursday after mixed US PMI figures

USD/CAD drifted into the low end early Thursday as markets geared up for the day’s US Purchasing Managers Index (PMI) print. Mixed results left markets a little less confident, and the pair traveled notable ground to wind up close to flat on the day. Canada saw a similar mixed result in its Retail Sales figures, with sales volumes excluding automobiles coming in below expectations. Next up on the economic calendar will be Friday’s Monetary Policy Report from the Federal Reserve (Fed), but little of note is expected within the report itself following the Fed’s latest meeting Minutes released on Wednesday.

USD/CAD backslid into a prime buying area early Thursday, settling into 1.3440 before staging a recovery. The pair knocked back into 1.3510 as it remains lashed firmly to the 1.3500 handle in the near term. The day’s dip into a heavy supply zone also saw an intraday Fair Value Gap (FFVG) form between 1.3480 and 1.3455, which got filled almost immediately and set the stage for further gains provided the market’s change of character holds through the end of the week. With Thursday’s down-and-up action on the USD/CAD, the pair is catching firm technical support from the 200-day Simple Moving Average (SMA) at 1.3478. A pattern of higher highs is dragging the pair further into bull country as the USD/CAD recovers from December’s lows at 1.3177.